In Brief:
- Alexander Hopter posted a blog to support Bitcoin as a legal tender
- CEO of Bitmex is confident about the expansion of Bitcoin in developing countries
- Bitcoin as a Legal currency can overcome the worst scenarios in economic crisis such as inflation
Alexander Hoptner, CEO of Bitmex is expecting the ‘Domino effect’ as El Salvador accepted BItcoin as a legal tender in the country along with the US dollar. The move can influence other countries to accept Bitcoin’s expansion.
Hoptner posted a blog on Bitmex’s website, In which he briefly discussed various parameters such as Remittances, Inflation, and Politics. According to him, these parameters can motivate developing countries to count on Bitcoin and at least 5 developing countries will start to accept Bitcoin as a legal currency by the end of the year 2022.
Last month, El Salvador accepted Bitcoin as a legal currency along with the US dollar. The move received a lot of criticism from the World Bank and mainstream media such as Financial Times, who called it a “dangerous gamble”.
It is an uphill task for countries like China and the USA, as they accept the “Powerlessness” to influence decisions regarding monetary policy. This inability can harm their citizens. That’s why they criticize this move.
According to Hoptner, this move from El Salvador “deserves praise, not derision”. He believes that there is definitely long term risk involved in a decentralized system. But, it can give too much credit to individuals.
Positive Effect of Bitcoin on Economy for Developing countries
In many developing countries such as El Salvador, the Philippines, and many African countries, a big portion of GDP comes from their manpower, who lives in other countries. This Remittance helps native countries to build a nation and improve citizens’ lifestyles.
But Currently, Many groups of countries such as the European Union have imposed rules over immigrants to send money back to their home country. They charge a 10% remittance fee, which is unfair according to Hornet.
Immigrants can overcome this regulation as Bitcoin allows them “near-negligible fees and quick 24/7/365 transactions”.
Inflation is a big concern for developing countries, which can break the spine of any country in the worst scenario.
“The IMF forecast 2021 inflation for developed countries at 2.4 percent. Its estimate for developing countries is more than double, at 5.4 percent,” Hoptner said.
Even when governments don’t take the initiative like in El Salvador, people seek alternatives to fiat currency during inflation crises. As inflation climbed well above 15 percent this year in Turkey, crypto adoption surged. Turkey responded by quickly banning the use of crypto for goods and services, but inflation is now at 19.25 percent.
As Bitcoin’s quantity is fixed to 21 million, it can stop inflation by avoiding senseless money printing.
The Political decision plays a vital role to declare Bitcoin as a legal tender in any country. El Salvador’s move can inspire other countries to understand the process of Bitcoin legitimization and its impact on the economy.
Moreover, Hoptner wants to support the country with Bitcoin as a legal tender.
